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Clean air policy and green total factor productivity: Evidence from Chinese prefecture-level cities

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  • Zhou, Lin
  • Fan, Jianshuang
  • Hu, Mingzhi
  • Yu, Xiaofen

Abstract

Clean air policy is an important mechanism for improving the urban environment and promoting green economic development. Green total factor productivity (GTFP) is an important way to measure these impacts. We apply the super-efficiency slack-based measure model, considering undesirable output, and the Global Malmquist-Luenberger index to measure the GTFP of 278 prefecture-level cities in China from 2005 to 2020. We find that GTFP growth is driven by both green technology progress (GTC) and green technology efficiency change (GEC). The traditional total factor productivity is overestimated, because energy and environmental factors are not considered. GTFP growth is higher in the cities in the eastern coastal regions compared to the western regions. We analyze the effect of clean air policy on GTFP using a difference-in-differences model and spatial-difference-in-differences model, and further conduct a heterogeneity analysis and mechanism analysis. The results show that clean air policy promotes GTFP growth. In addition, there is a significant negative spatial spillover effect with respect to the impact of clean air policy on GTFP. The heterogeneity analysis results show that the impact of clean air policy on GTFP growth is lower in resource-based cities and cities in the northern region, compared with non-resource-based cities and cities in the southern region. Further, the impact of clean air policy on GTFP growth is mainly achieved through GTC, GEC, innovation, and financial development. In resource-based cities and cities in the northern region, clean air policy decreases GTFP by inhibiting GTC, innovation, and financial development.

Suggested Citation

  • Zhou, Lin & Fan, Jianshuang & Hu, Mingzhi & Yu, Xiaofen, 2024. "Clean air policy and green total factor productivity: Evidence from Chinese prefecture-level cities," Energy Economics, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:eneeco:v:133:y:2024:i:c:s0140988324002202
    DOI: 10.1016/j.eneco.2024.107512
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    Cited by:

    1. Fan Ren, 2024. "Does Government Environmental Concern Affect Enterprise Sustainable Development? Evidence from China," Sustainability, MDPI, vol. 16(21), pages 1-21, November.

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    More about this item

    Keywords

    Clean air policy; Green total factor productivity; Spatial spillover effect; China;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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